Attracting Franchise Models For Economic Growth And Entrepreneurship
A leading consumer sector legal expert has said more should be done to encourage franchise businesses into the UK, highlighting their importance in fostering a thriving retail and hospitality sector and inspiring UK-based entrepreneurs.
The claim by Charlotte Rees-John, partner at Irwin Mitchell and head of its consumer goods and services sector team, coincides with the launch of a new report into foreign direct investment FDI by her firm.
The latest data reveals that the UK has attracted £2,000 billion in FDI, which not only creates jobs but also enhances productivity, competitiveness, and innovation. The retail sector experienced a £59 million reduction in FDI in 2021, amounting to £169 billion. In contrast, hospitality services saw a £41 billion increase, reaching £209 billion.
The USA is the leading source of FDI flowing into the UK, accounting for 34% (£676 billion) in 2021.
Expert Opinion"The market here is well supported by US brands, with many of our favourite food and drinks outlets originating in the US. Inward FDI is a key factor in promoting the domestic economy, raising productivity, and facilitating technology transfer. Promoting the UK as a location for FDI can help drive growth." Charlotte Rees-John, Partner at Irwin Mitchell and Head of its Consumer Goods and Services Sector Team
Rees-John cited the success story of her client Wingstop, a Texas-based brand that now operates over 30 restaurants in the UK through master franchise holder Lemon Pepper Holdings. She emphasised the importance of franchising for overseas businesses to expand their international reach, allowing UK-based entrepreneurs to establish strong local businesses.
Expert Opinion"To attract more foreign direct investment, the UK Government must focus on providing quality infrastructure, offering businesses good access to credit, and supporting sustainable economic growth. This will create an attractive environment for international investors and help the UK become a global FDI leader." Charlotte Rees-John, Partner at Irwin Mitchell
The report outlines three main recommendations for improving economic development and increasing interest in the UK:
- Provide quality infrastructure: Robust transport and digital infrastructure are crucial for attracting investment across industries.
- Offer businesses good access to credit: A business-friendly financial system is vital for attracting FDI and supporting the UK's leading financial services sector.
- Support sustainable economic growth: A stable economic environment will encourage foreign investors to engage in FDI in the UK.
By implementing these recommendations, the UK can foster an attractive environment for global franchise models in retail and hospitality, spurring economic growth and empowering local entrepreneurs.